Finance capacity expansion project

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Reference no: EM131310141

You are considering to borrow 1.25 million dollars to finance a capacity expansion project. The loan is payable in three equal annual installments in years 1, 2, and 3 after you receive the loan. The effective interest rate is 22%. If your tax rate is 47.880% and your minimum attractive interest rate is 13.957%. What is the NPW/NPV of this loan proposition in dollars (do not put into thousands or millions). (Hint: your annuity should be ~612K)

Reference no: EM131310141

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